What happens if a car dealer does not pay off your loan after you buy a car from them?
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What happens if a car dealer does not pay off your loan after you buy a car from them?
I traded my car in at a car store over 60 days ago the dealership has still failed to pay it off. After a large amount of complaining I have gotten them to reimburse me for the payments but they claim financial hardship and say they can’t pay it off. I now have both loans this one and the new on my credit and am unsure what my recourse can be. We did have a contract and they are obviously breaching there side. Can I legally go take the car back? I don’t want it but it seems like me selling it at this point is a more viable option than me financing there inventory.
Asked on October 8, 2010 under General Practice, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
You need to consult with an attorney. The short answer is, if there is breach of contract, depending on the circumstances, that breach would entitle you to either sue for monetary damages (e.g. additional costs you've incurred), to enforce the contract (e.g. to force someone to honor the terms), and/or to rescind the contract. However, you can't simply unilaterally take the car back, sell it, etc.--you need a legal determination of your rights, which will either come from a settlement with the dealer or from a court adjudication. If you act without that determination, if the other party disagrees, they may end up taking legal action (e.g. suing) against you. An attorney can help you understand what recourse you have in your specific case, as well as the cost of pursuing that option and the likelihood of success (nothing is ever given). If the dealership is in legitimate financial distress, you also need to factor in the likelihood (if you sue for damages) of winning but being unable to collect.
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